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Credit Ratings

What are Heartland Bank's credit ratings and what do they mean?

Heartland Bank has long-term issuer ratings issued by Standard & Poor's and Fitch Ratings.

Standard & Poors BBB (Outlook Negative) A rating of BBB from Standard & Poor's means Heartland Bank has adequate capacity to meet its financial commitments.  However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of Heartland Bank to meet its financial commitments.
Fitch Ratings BBB (Outlook Stable) A rating of BBB from Fitch Ratings indicates that expectations of default risk are currently low.  The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity.






What is a credit rating?

A credit rating is an independent opinion of the capability and willingness of a financial institution's ability to repay its debts - in other words its financial strength or creditworthiness.

Credit ratings are based on research and analysis by a ratings agency.  Rating agencies look into a range of financial measures when they assess an organisation's financial strength, as well as external industry-related issues and the quality of management and internal processes. 

What is the scale used for credit ratings?

Generally a lower credit rating indicates a higher risk that an institution will 'default' and an investor will not get their money back in full and/or on time as promised. The rating scale used by Standard & Poor's is shown below. Heartland Bank's BBB rating from Standard & Poor's sits in the 'BBB Adequate' part of the scale.  The rating scale used by Fitch Ratings is largely the same as the rating scale used by Standard & Poor's and can be found on Fitch Ratings' website.

Extremely Strong Very Strong Strong Adequate
(Heartland Bank)
Less Vulnerable More Vulnerable Currently Vulnerable Currently Highly Vulnerable Default
Capacity to make timely payments Vulnerability to non-payment

Source: adapted from Reserve Bank of New Zealand 'Know your credit rating' document March 2010.

Ratings between AA and CCC (by Standard & Poor's) and between AA and B (by Fitch Ratings) may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

A credit rating may also include an "outlook" assessment. An outlook assessment considers the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). An outlook assessment is not necessarily a precursor of a rating change. The common rating outlook definitions are: Positive - means that a rating may be raised; Negative - means that a rating may be lowered; Stable - means that a rating is not likely to change; and Developing/Evolving - means a rating may be raised or lowered.

Where can I find more information?

  • You can find out more information about Heartland Bank in our Disclosure Statement or one of our Product Fact Sheets by clicking here, or by calling 0800 85 20 20 to talk to our investment team.
  • The Reserve Bank has some useful information on credit ratings on its website - http://www.rbnz.govt.nz/.
  • Additional information can also be found on the Standard & Poor's website – http://www.standardandpoors.com/. and on the Fitch Ratings website www.fitchratings.com
  • Investors may also wish to engage a financial adviser for independent advice and Heartland Bank encourages you to do so.

If you have any questions regarding the above disclosure, call our Investment Team on 0800 85 20 20. We are here to help.